All posts tagged mortgages

Average mortgage rates fell to the lowest level since mid-November last week as unease over economic growth in the U.S. and market turmoil abroad prompted investors to load up on government bonds, pushing down long-term interest rates. Read More »

A top Treasury Department adviser on housing policy outlined a series of initiatives that the Obama administration could undertake in 2014 to overhaul the nation’s mortgage market, even if Congress doesn’t succeed in shepherding a bipartisan overhaul of Fannie Mae and Freddie Mac.

Michael Stegman, a senior Treasury adviser, offered greater detail in a speech Wednesday about what kind of mortgage infrastructure should be built to take the place of Fannie and Freddie, and he outlined transition steps that could become a priority for the Federal Housing Finance Agency, which has a new director in former Rep. Mel Watt.

Here are some of the highlights of the speech he delivered at an industry conference in Las Vegas: Read More »

Like a zombie that keeps coming back from the dead, news reports continue to suggest there’s a large “shadow” inventory of potential foreclosures threatening to sink the housing market. There’s just one problem: the data doesn’t show it.

For the past three years, a number of housing pundits have issued ominous warnings about the millions of underwater mortgages, modified mortgages, and delinquent mortgages that threatened to drag down the housing market. But efforts to modify and refinance mortgages—together with surprisingly strong demand from investors for distressed properties—have whittled down this shadow supply. Read More »

Changes in the mortgage market have led to Fannie Mae’s lending-policy review.

Fannie Mae is in discussions to curb its purchases of mortgages that require a minimum down-payment of 3%, according to people familiar with the discussions.

Fannie never stopped accepting purchases of loans with 3% down payments, even after lending standards were ratcheted up following the housing bust. But many lenders stopped offering them, in part because they weren’t able to obtain mortgage insurance for those loans, which Fannie requires.

In recent months, however, a series of changes in the mortgage market have led to an uptick in low-down-payment loans available for sale to Fannie. That prompted a review of the company’s lending policies, and officials are said to be working on a plan to limit the company’s purchases of these loans. The changes aren’t being made because of immediate problems with loan performance, according to people familiar with the discussions. Read More »

Few other markets have embodied the notion of “hope springs eternal” more than mortgage securities, which were among the leading causes of the financial crisis.

But this year, many participants in the mortgage securitization business seem to be taking a more optimistic view on the return of “private label” mortgage bonds than at any time since their issuance ground to a halt in 2008. These players are among the rising number of attendees at the annual conference of the American Securitization Forum, where over the years speakers complained of a “Groundhog Day” effect, where constraints ranging from a soft housing market to regulatory uncertainty were continuously stunting a recovery. Read More »

Banks and mortgage companies thought that they were getting a clear set of ground rules earlier this month when regulators spelled out long-awaited rules clarifying how they could satisfy new mortgage standards. But a new court ruling is calling all of that clarity into question.

The Consumer Financial Protection Bureau issued the “qualified mortgage” definition three weeks ago, which told banks how they could reduce their legal liability under new rules that require them to ensure borrowers have the ability to repay a mortgage. (Here’s a look at what those rules mean for banks and consumers.)

Now, the authority of the CFPB’s director, Richard Cordray, is in doubt because he was appointed by President Barack Obama without Senate confirmation during the Senate’s recess early last year. Read More »

Home prices finally hit a bottom in 2012. So will 2013 be the year of recovery or relapse? This is the fourth in a series of blog posts about where housing is headed next year.

Credit standards are tight. Yes, the Federal Housing Administration allows borrowers with credit scores of less than 700 and down payments of just 3.5% to buy homes. But lenders are still scrutinizing property appraisals, reams of income and bank statements, and anything else that could be used to force them to buy back the loan should it default, which means that it is much harder to get a loan than at any time since the 1990s.

Rising home prices could eventually serve as a tailwind for credit. But it’s not clear how aggressive lenders will be in easing their standards as long as they have plenty of business—which they do right now thanks to heavy refinancing volumes from low interest rates.

There are other factors that are likely to keep restraints on mortgage lending next year. Read More »

Homeowners dealing with the devastation of Sandy may be eligible for a temporary break on their mortgage payments from Fannie Mae and Freddie Mac.

The government-controlled mortgage finance giants said Tuesday that mortgage companies that collect payments for them can give breaks to homeowners affected by the storm. The aid will come in the form of a forbearance plan, which allows homeowners to delay payment on some or part of the loan, but the amount is still owed.

Fannie Mae said it allows mortgage companies, also known as loan servicers, to temporarily suspend or reduce a homeowner’s mortgage payments for up to 90 days without reaching the homeowner. After that, homeowners may get additional aid, typically for up to a year. Read More »

It’s no surprise to anyone who has applied for a loan recently that banks are being far more careful. But a new report shows just how tight conditions have become — and how even borrowers with favorable credit profiles are being denied.

Loans closed by banks and mortgage lenders in February had borrowers with a credit score of 750, up from 740 six months earlier, and an average loan-to-value ratio of 76%. The average denied loan had a credit score of 699 and a loan-to-value ratio of 83%.

“Talk about high-quality loans — those are pristine,” says Jonathan Corr, chief operating officer of Ellie Mae, a mortgage software provider that tracks the characteristics of loans run through its platform. Read More »

Rates for fixed mortgages moved higher over the past week amid positive signals from the long-suffering U.S. housing market, according to Freddie Mac’s weekly survey of mortgage rates.

“Fixed mortgage rates ticked up this week as the housing market ended 2011 on a high note,” said Freddie Mac Chief Economist Frank Nothaft, noting encouraging data like a report that existing home sales rose 5% at the end of the year to 4.61 million houses, the largest amount since May 2010.

The 30-year fixed-rate mortgage averaged 3.98% for the week ended Thursday, up from 3.88% the previous week, though below 4.8% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.24%, up from 3.17% last week and below 4.09% a year earlier. Read More »